Where Are the Anti-Liberty Guns Pointed?
Stand Up for Religious Freedom Rally
Last week, candidate for the Democratic nomination for president, Beto O’Rourke, drew headlines for announcing that churches should lose their tax-exempt status for opposing same-sex marriage.
“There can be no reward, no benefit, no tax break for any institution or organization in America that denies the full human rights and full civil rights of every single one of us.” (Reported in Deseret News)
The comment sparked a lot of commentary, including from our own Kevin Schaal here: “What Does Your Church Hold Dear?” Al Mohler surveys the attitudes of all Democratic candidates and other leaders in “The Cultural Left Bares Its Teeth: An Open Threat to Churches and Christians Who Hold to Biblical Conviction.” Walter Olson at the Cato Institute touches on legal ramifications in this piece, “O’Rourke: Churches That Don’t Support Rights Should Lose Exemption.” Ed Stetzer at Christianity Today talks about his surprise at the lengths to which the Democrats are going on this issue in “The #EqualityTownHall Was Loud and Clear: The LGBTQ+ Community, Beto, the Equality Act, and Evangelicals.” And over at Rewire.News, cases currently before the Supreme Court bear direct connection to this issue: “In Latest Round of LGBT Discrimination Cases Before SCOTUS, Religion is ‘The Elephant in the Room’.”
I’m sure there is more; one can only take in so much information at once. It seems that a great deal of the talk so far is about the impact on institutions. The Democrats are talking about taking the tax exempt status away from churches as institutions (and perhaps from Christian colleges and other parachurch organizations). To a certain extent, speaking about this on the institutional level depersonalizes the issue. Making the topic “institutional” makes the issue a problem for non-personal entities in our life. An institution, like a church, is a corporation. A corporation, an institution, can be penalizes as a bad actor in our world, and it only serves that entity right (so the thinking might go in the mind of John Q. Public).
The reality is that the corporate nature of the institution is really a legal fiction. The site Investopedia.com defines a corporation this way:
A corporation is a legal entity that is separate and distinct from its owners. Corporations enjoy most of the rights and responsibilities that individuals possess: they can enter contracts, loan and borrow money, sue and be sued, hire employees, own assets and pay taxes. Some refer to it as a “legal person.”
Here is Dictionary.com:
an association of individuals, created by law or under authority of law, having a continuous existence independent of the existences of its members, and powers and liabilities distinct from those of its members.
In talking about removing tax exempt status from a corporation, a verbal sleight of hand (intentional or unintentional) occurs. We are talking about an entity, not individuals who might be members of that corporation. We see the corporation as distinct from its principles, the people who make it up.
Our Christian commentators quite rightly see these threats as an attack on our Christian institutions and on religious liberty. They certainly are correct, that is exactly what they are. However, the attack is far more serious than that.
If a non-profit institution (a church, a school, a camp, what have you) lost its tax-exempt status, what would that mean? In the short run, it would mean that the institution would have to file corporate tax returns and be subject to paying taxes. Most such institutions are not making boatloads of money, however. The immediate tax burden might not have an immediate impact on the institutions (although I am sure the attacks would not end simply in the matter of annual taxation).
However, when an institution loses its tax-exempt status, the much more immediate consequence is that individual would no longer be able to claim a tax deduction for their donations. They could still donate, of course. But they would have to pay to do so! They would be taxed on their donations, and any benefit their previously tax-exempt donations gained would evaporate overnight.
Al Mohler pointed out:
The first Chief Justice of the United States Supreme Court said that the power to tax is the power to destroy.
Exactly. But the taxation howitzers would first point at the individuals who dared to support these non-compliant corporations. The state would attempt to coerce individuals to change their behaviour (if not their beliefs) by taxing their discriminatory values (so-called).
To me, this is what is most troubling about this threat — these are the values of totalitarians. They do not approve of the way you think. That’s right, the “guns” of anti-liberty are pointed at you and me.
What should we do about all this? In democratic societies, we can exercise political action. We will need great wisdom and liberty loving allies to defend against those who will attack. We also need clear thinking about the way forward, as Kevin said in his piece yesterday. We also need to build up our courage and commitment to the Lord. And we need to pray that God will intervene. This first of all, and always, must be our response.
Don Johnson is the pastor of Grace Baptist Church of Victoria, Victoria, BC, Canada.
Excellent analysis, Don, and very true to the real intent of the God-hating Left in this country and around the world. They realize that Churches and schools and other Charitable institutions will be able to “write off” the vast majority, if not all their “income” in the form of offerings, etc. Technically, even offerings would not be taxable to the churches as income because they are “gifts” under the current code. However, this is only round one, and is primarily aimed at those who itemize and make large gifts to schools, charities that stand for godly principles, and churches which actually stand for truth.
Round two will be the modification to accomplish the original intent of destruction, which won’t be done by Round One above. It will include modifying the tax code to make gifts to these entities “taxable income” and the review of the teachings or doctrines or stated positions of religiously affiliated organizations, churches, schools, hospitals, etc. When these reviews take place and the targeted organization is not compliant, they will face retroactive taxation and other penalties. Those who gave to them and deducted the gifts as charitable will be audited and penalized accordingly. This Round Two will also be broadened to include penalize other objectionable viewpoints, such as anti-abortion, biblical view of marriage and sexual expression, condemnation of sin in general (due to its psychological effects – think illegality of gay conversion/natural restoration therapy currently in law in New Jersey and California, etc.). And yes, there is a Round Three for those still standing.
Round Three is the imprisonment of those still bold enough to challenge the governmentally assigned cultural norms (known in the law as “Public Policy”), the violation of which will be made criminal and/or considered psychologically “unstable” and dangerous to society.
I am no wizard in saying this. It is clear from other Communist/Socialist societies that this is how you take down a Judeo-Christian society that has abandoned truth for entertainment and “bliss” brought on by willful ignorance. Living in Connecticut, I have many Eastern European friends who see this coming and are distraught that native born Americans don’t see this coming. They have lived through it.
Don, the teeth have been pulled out of this somewhat with Trump’s most recent tax revision. He raised the standard deduction so high that itemizing individual donations is a non-factor for most people. Most don’t see this is an issue because of the fact that they are not seeing more actual taxes owed.
You are correct in saying that most religious institutions do not turn a profit. So that will not be as much of an issue.
The big problem for churches and other Christian entities will be PROPERTY taxes. Those will be crippling immediately. In the US property taxes vary anywhere from 1% to 5% of the value of a property annually. Many churches have extremely valuable properties purchased decades ago–especially some inner city church.
The idea of tax-exemptions for churches is rooted in the Constitutional restriction of the state religion. The power to tax is the power to control through taxation. When the government has the power to control religious institutions, in essense, it owns them.
I agree that the power to tax is the power to control. And it is good that the personal exemptions are high, but ours in Canada are similar. Donations still make a difference nonetheless.
Are non-profit property taxes the same as for-profit corporations? I would suspect that the left would attempt to make it so, but I think major lawsuits would erupt over that one.
We have some issues with property tax in our province, but I believe it is because the municipalities are misinterpreting the law. However, who wants to go to court to prove it? Here, non-profits are taxed at a different rate than regular corporations.
Maranatha!
Don Johnson
Jer 33.3
In particular, the potential for churches to owe property taxes is a problem most particularly for churches that are carrying large outstanding debts, like mortgages and equity loans.
In the US property taxes are a function of local and state governments. Some state and local governments determine the liability for such taxes based solely on the Charitable (tax exempt) status given by the federal government which requires 501(c) 3 approval for all but churches, which are de facto exempt, although some have sought and received official recognition. Other state and local governments determine property tax exemptions based on the nature of the use and other statutory factors that currently exist in local law.
The Catholic church owns billions of dollars worth of property that is nothing more than investment property and has no arguable religious or charitable character or use. While the income is not taxed by any government, they usually have to pay property taxes on those properties now.
The net effect of loss of exemption for many ministries will be an immediate jeopardy for property taxes going forward. If a church were to lose its exemption retroactively because of a change in “Public Policy” (See the US Supreme Court ruling in the Bob Jones University decision from 1983), it may be faced with retroactive taxation such as the $489,000 plus interest bill handed to Bob Jones University for five years of federal employer payroll taxes after the “Public Policy” changed. The only difference here is that the policy deals with LGBTQ instead of racial issues. The Court in that case made its ruling applicable only to schools and other non-Church entities. There was no bulwark built into that decision to prevent bleed-over to our ministries today though.
With the direct statement of Beto Boy as to the intent and the clearly ready attitude of the Left in our nation today to eliminate churches that do not whole-heartedly embrace LGBTQ, we can be sure as to how the “Public Policy” will be interpreted going forward, if we fail to elect the right leadership. All you have to do is substitute the acronym “LBGTQ” for “racial discrimination in education” written in that decision and you have the green light under that case (8-1 decision) to eliminate the exemption. Quoting the decision: “Government has a fundamental, overriding interest in eradicating racial discrimination in education . . . which substantially outweighs whatever burden denial of tax benefits places on [the University’s] exercise of their religious beliefs.”